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Changing Profiles of Major Stakeholders of Industrial Relations in India

Chapter

Changing Profiles of Major Stakeholders of Industrial Relations in India

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ASJAD USMANI

Changing Profiles of Major Stakeholders of Industrial Relations in India

Trade Unions 1. Blue Collar-Workers' Trade Union


Trade Unionism grew as one of the most powerful socio-economic political institutions of our time - to fill in the vacuum created by industrial revolution in the industrial society. It came as a countervailing force to reconcile social and economic aberrations created by Industrial Revolution. FORMATIVE STAGES
Trade Union had to pass through a very difficult and hostile period in the initial years. The employers wanted to crush them with iron hands. Then came the period of agitation and occasional acceptance.

When the union gained strength, they started confronting the employer. This is the period of struggle which continued for long.
Employers were forced to accommodate, tolerate and hesitatingly accept them. Then came the period of understanding collective bargaining in the industry.
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DEFINITION Trade union is an association either of employees or employers or of

independent workers.
It is relatively a permanent formation of workers. It is not a temporary or casual combination of workers. It is formed for securing certain economic (like better wages, better working

and living conditions), and social (such as educational, recreational, medical, respect for individual) benefits to members.
A more recent and non-legislative definition of a union is: "An organisation of workers acting collectively, who seek to protect and promote their mutual interests through collective bargaining". De Cenzo and Robbins (1993)
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FORMS OF TRADE UNIONS 1. 2. 3. Classical: A trade union's main objective is to collectively protect the interests of its members in a given socio-economic-political system. Neo-classical: It goes beyond the classical objectives and tries to improve other wider issues like tax-reliefs, raising saving rates, etc. Revolutionary change in the system: Establishing the rule of working class even through violence, use of force, etc.

Functions of Trade Unions a) b) Militant or protective or intra-mutual functions Fraternal or extramural functions

c)
d)

Political functions
Social functions
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Objectives of Trade Unions a) b) c) d) e) f) g) h) Wages and Salaries Working conditions Discipline Personnel policies Welfare Employee-employer relations Negotiating machinery Safeguarding organisational health and the interest of the industry

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ROLE OF TRADE UNIONS a) Sectional Bargainer

b)
c) d) e) f) g)

Class Bargainer
Agents of State Partners in Social Control Unions' role Business Oriented Role Unions as Change Agent

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CLASSIFICATION OF TRADE UNIONS Classification based on ideology Revolutionary Unions: Believe in destruction of existing social/economic order. Reformist or Welfare Unions: Work for changes and reforms within the existing socio-political framework of the society - European Model. Uplift Unions: They advocate extensive reforms well beyond the area of working condition. Many unions have memberships and jurisdictions based on the trades they represent. The most narrow in membership is the craft union, which represents only members certified in a given craft or trade, such as pipe fitting, carpentry and clerical work. At the other extreme, in terms of the range of workers represented in the general union, which has members drawn from all trades. Most unions in India Cont. and Sri Lanka are in this category.
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Classification Based on Trade

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Changing Profiles of Major Stakeholders of Industrial Relations in India

Classification Based on Agreement Closed Shop Union Shop Preferential Shop Maintenance Shop Agency Shop Open Shop Theories of Trade Unionism a) Political Revolutionary Theory of Labour Movement of Marx and Engels b) Webb's Theory of Industrial Democracy c) Cole's Theory of Union Control of Industry d) Common's Environment Theory e) Mitchell's Economic Protection Theory of Trade Unionism f) Simon's Theory of Monopolistic, anti-Democratic Trade Unionism g) Perlman's Theory of the "Scarcity Consciousness" of Manual Workers
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GROWTH OF TRADE UNION MOVEMENT AND MEMBERSHIP Early Period

Efforts towards organising the workers for their welfare were made during the early period of industrial development by social workers, philanthropists and other religious leaders mostly on humanitarian grounds. The first Factories Act, 1881, was passed on the basis of the recommendations of the Bombay Factory Commission, 1875. Due to the limitations of the Act, the workers in the Bombay Textile Industry under the leadership of N. Lokhande demanded reduced hours of work, weekly rest days, mid-day recess and compensation for injuries.
Modest Beginning

The beginning of the Labour Movement in the modern sense started after the outbreak of World War I in the country. Economic, political and social conditions of the day influenced the growth of trade union movement in India. Establishment of International Labour Organisation in 1919 helped the formation of trade unions in the country. 3-9 Cont.
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Some of the typical Joint Committees are: 1. Compensation Committee

2.
3. 4. 5. 6. 7. 8. 9.

Welfare Committee
Canteen Management Committee Transport Management Committee Sports and Entertainment Committee Employee of the Month Committee Suggestion Committee Employees Health Safety and Environment Management Committee Good House Keeping Committee

10. Grievance Committee


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TRADE UNION ACT, 1926 The Trade Union Act 1926 legalises the formation of trade unions by allowing employees to form trade union. It allows trade union to get registered under the Act. Registration provides legal status to the trade union and it becomes body corporate. It can hold moveable and immoveable property and can enter into contract and can sue and can be sued. The Act also provides immunities to the unions from civil and criminal prosecution for bona fide trade union activities. The Union can generate General Fund for the day-to-day activities and Political Fund for political activities (For details - Refer Act).

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RECOGNITION OF TRADE UNION The underlying idea of forming a trade union is to negotiate and bargain with employers to improve the service and employment conditions of workers on their behalf. This collective bargaining process can be possible only when the employer recognises the trade union as a bargaining agent and agrees to negotiate with it because it is difficult to negotiate with multiple trade unions in a single organisation. The Trade Union Act 1926, is the only Central Law, which regulates the working of the unions and does not have any provision for recognition of trade unions. Some attempts were made to include compulsory recognition in the Trade Union Act of 1947, 1950, 1978 and 1988, but these did not get materialised.

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RIGHTS OF RECOGNISED UNIONS a) the right to raise issues with the management,

b)
c) d) e) f) g) h)

right to collect membership fees within the premises of the organisation,


ability to demand check-off facility, ability to put up a noticeboard on the premises for union announcements, ability to hold discussions with employees at a suitable place within the premises right to discuss members' grievances with the employer, ability to inspect beforehand a place of employment or work of its members,

and
nomination of its representatives on committees formed by the management for industrial relations purposes as well as in statutory bipartite committees.
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PROBLEMS CONFRONTING UNIONS AND MEASURES TO STRENGTHEN TRADE UNION MOVEMENT IN INDIA Trade Union Leadership Reasons for Emergence of outside Leadership The Evil Effects of outside Leadership Measures to Minimize the Evil Effects of outside Leadership Measures to Minimise Union Rivalry Multiple Unions Union Rivalry Finance Other Problems 1. Illiteracy 2. Uneven growth 3. Low membership 4. Heterogeneous nature of labour 5. Lack of Interest Cont. 6. Absence3-14 of paid office-bearers
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Changing Profiles of Major Stakeholders of Industrial Relations in India

Measures to strengthen Trade Union Movement in India The following are some of the measures to minimise trade union problems and to strengthen the Trade Union Movement of India.

United Labour Front


Efficient Leadership Membership Fees Other Measures

BUILDING RESPONSIVE TRADE UNIONISM i. ii. Inactive Reactive Indifferent, none of their business' posture. Violent reaction, blocking, rejecting, coercing, striking.

iii.
iv. v.

Responsive
Proactive Partnering
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Addressing, supporting, adopting.


Agent/catalyst of change. Responsible, taking risks along with employers.
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STRATEGY FOR BUILDING RESPONSIBLE TRADE UNIONISM 1. 2. 3. 4. 5. Micro to macro focus Bargaining to sharing Grooming trade union leadership Conflict to collaboration Developmental role

6.
7. 8.

Enhancing union influence


Protective regulation to self-sustenance Openness and transparency

9.

Effective utilisation of alternative forums

10. ACCEPT, SHARE and GROW


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FEMALE WORKERS and TRADE UNIONS Female workers in India are mostly employed in the organized sector. Therefore, the trade unions, which initially represented mostly organized workmen, did not pay much attention to female labour. It is only recently that some national trade union centers in India have announced that if their affiliates send nominations for representation at various decision-making levels in the union hierarchy without a woman member in the panel, they will not consider the panel. Union membership and union leadership amongst women is higher in some occupations than in others. In the garment industry, the proportion of women to the

total

members

could

be

about

70%.

In

plantations,

hospitals,

hotels,

telecommunication, public service, and anganwadis, women occupy positions as joint secretary/secretary. In teaching and nursing they hold even higher positions.
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Why Women Do Not Join Unions 1. 2. Family responsibilities-childcare, all household duties-are left mainly to women. Religion, taboos, and cultural inhibitions make it difficult for women to break into male environments.

3.

In the workplace, women are often employed in subordinate positions under the supervision of men in more powerful positions. The occupational segregation in union structures create barriers for women's advancement.
Trade unions are often male dominated because of

4.

The notion that working in the union is a 24 hours a day job,


The tendency to hold meetings at night, Union jargon and sexist language, Informal male structure(old-boys network),

Less interest in women's issues,


Less access to education and training for women in many places,
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EMERGING TRENDS 1. 2. The customized services hypothesis that union will individualise services. The cyber organizing hypothesis that the Web will produce virtual minority unions in many non-union firms. 3. The cyber democracy hypothesis that the Web will become an important forum for industrial disputes. 4. 5. The Web will strengthen the international labour community. The Web will strengthen the international labour community by helping union

exploit the opportunities on the Web to gain membership.

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2. White-collar Trade Unions


There was a time when unions and strikes were known only to blue-collar workers in factories, mines, railways docks, etc. White-collar employees and professional

people like doctors, engineers, lawyers, professors and senior executives and
managerial staffs thought it below their dignity to band themselves in unions, march the high streets and yell slogans. Today, it is different. Trade unions exist among most professionals, white-collar employees, officers, senior executives and

managers, and so do strikes and gheraos.

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WHITE-COLLAR WORKERS AND BLUE-COLLAR WORKERS


Differences between Blue and White-Collar Workers
S.No. Blue -Collar Worker White Collar Worker

1.

All shop -floor workers (Part of the production team who operate machines and related systems) are termed as blue -collar workers, as their work is not generally clean.

All clerical or office staff who do notwork on the shop floor, are termed as white -collar workers as their work and working places are clean. They are generally involved in a desk job or providing service over the counter.

2.

They are manual workers with lower literacy and education and have their own social and economic background.

They are non-manual workers forming a distinct social ground, characterised by divergent socio economic backgrounds, level of education, manner of speech, social custom and ideology. They are better educated and ha ve jobs requiring mental capabilities to a greater extent.
They are time -workers paid on monthly basis. They enjoy longer holidays and leave facilities and better privileges.

3.

They may be paid by time, or by piece, or results, either on daily, or weekly, or fortnightly, or monthly basis. They are generally wage earners, and may have lesser holidays, and leave facilit ies and other privileges than white -collar workers.

4.

They are not so inc lined towards They hold such jobs that they are regarded as management. On the other hand, they may be part of the management, and so they are more caring f or their unions than for the inclined towards it than the blue -collar workers. management.

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5.

Excepting highly skilled categories who are in greater demand and can manage to have higher wages in income, the blue -collar workers are not so well paid. Their fringe benefits and perquisites are lower than those of white -collar workers. They have better union protection and job security by labour legislation, such as Industrial Disputes Act. They are mostly engaged in production processes.

Because of their professional and social standing they are generally better paid and have better t erms and conditions of employment, including better perquisites and fringe benefits. They have no union protection if they are not unionised, and also job security if they are not covered by the Industrial Disputes Act, 1947 as may be the case with a few of them. They are concentrated in the fields of commerc e, t rans port, stor age and communication. They are engaged in different occupations that fall under the category of professional, administrative, executive and managerial workers, clerical and related workers, sales staff, technical and supervisory and other workers, engaged in transp ort and communication services, or in sports and recreational facilities, artists and musicians. They are linked with their employers by being associated with that part of the product ive process where authority is exercised and decisions are taken.
Cont.

They have no authority, nor are they associated with decision taking.

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Why White-Collar Workers' Unions? The growth of white-collar unionism are:

1.
2.

Denial of both, job security and social security to them by their exclusion from the purview of labour laws like Industrial Disputes Act, 1947.
Anomalies in pay caused by implementation of the recommendations of Wage Boards and Pay Commissions.

3.
4. 5. 6.

Nationalisation and consequent rationalisation of pay and perquisites.


Inconsistent and discriminatory promotion and salary policies which have been causing so many conflicts and disputes. Gradual narrowing of wages and salary differentials of blue and white-collar workers due to fast improvement in the wages. Inflation and soaring prices resulting in erosion of pay and standard of living of white-collar workers and, thus, leading to demand for higher pay, dearness Cont. allowance and annual bonus and other fringe benefits.
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Managerial Associations
Managerial trade unionism is no longer a fiction, but is an established fact. Though this phenomenon is more than forty years old, it is yet to be considered as worthwhile to be concerned with, either by the Government or by the Central bodies of trade unions or by academicians. The Government could not enact a legislation concerning this aspect of trade unionism or could not introduce some procedure for redressal of grievances of the managerial staff. The Central organisations of trade unions could have provided leadership or guidance for proper organisation of such unions. The academicians, if they had wished, could have attempted an indepth study of managerial unionism and workshops. It is only the corporate managements who could not ignore this happening. In fact, they are finding it difficult to develop working relations with their managers and other officers in the absence of any corporate or national policy on this subject.
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Employers' Associations
Employers' Organisations (EOs) are "formal groups of employers set up to defend, represent or advise affiliated employers and to strengthen their position in society at large with respect to labour matters as distinct from economic matters. They may conclude collective agreements but this is not a formal rule and cannot be an element of their definition. Unlike trade unions, which are composed of individual persons, employers' organisations are composed of enterprises. Most legal definitions of a trade union apply to them (Oechslin, 1990). The Trade Union Act, 1926 includes in its purview, both associations of workers as well as employers. Employers' Associations came into existence as a result of the formation of ILO and the growing presence of Trade Unions, especially after the First World War.

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Objectives Primary a) b) c) d) Promote and protect the interests of employers engaged in industry, trade and commerce in India. Study, analyse and disseminate information relating to labour policy, labourmanagement relations, collective bargaining, etc. Offer advice concerning various aspects of labour policy. Liaise with Union Government and initiate steps that are representative and legislative in nature. Train and develop staff and members. Obtain data on wages and conditions of work in industries attached to them. Take up projects for social and family welfare. Initiate steps to improve public image and improve public relations.
Cont.

Secondary a) b) c) d)

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Government Policies and Industrial Relations


In the initial years of Industrial Revolution, Government followed the policy of Laissez faire (non-interference) in settling Employers' and Workers' problems. Parties were left free to settle scores the way they liked. Towards the end of the 19th century, the change was witnessed in the attitude of the Government. It was constrained to intervene and bring protective legislations because of the following reasons: Pressure from ILO/ILC/SLC. Pressure from T.U. Movements. Gandhian philosophy of trusteeship, Govt. felt the need to develop instruments of voluntarism. Pressure from Constitutional obligations to fulfil Pledges and Promises as enshrined in the Preamble, Fundamental Rights and Directive Principles of State Policies. Government emerged as the biggest employer.
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ROLE OF THE STATE IN INDUSTRIAL RELATIONS As the National Commission on Labour (1969) observed, "The concern of the State

in labour matters emanates as much from its obligations to safeguard the interests
of workers and employers, as to ensure to the community, the availability of their joint product/service at a reasonable price. The extent of its involvement in the process is determined by the level of social and economic advancement, while the

mode of intervention gets patterned in conformity with the political system obtaining
in the country and the social and cultural traditions of its people."

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CONSTITUTION AND LABOUR POLICIES The preamble to the Constitution of India provides the framework within which the labour policies of the organisation can be formulated in India: "We, the people of India, having solemnly resolved to constitute into a sovereign socialist secular democratic republic and to secure to all its citizens;

JUSTICE, social, economic and political;


LIBERTY of thought, expression, belief, faith and worship; EQUALITY of status and of opportunity; and to promote them among all,

FRATERNITY assuring the dignity of the individual and the unity and integrity of the
Nation"

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Evolution of labour policy during the five year plans A major landmark event influencing post-independence era labour policies was the

report of the Labour Investigation Committee, 1946. The National Government in 1946 drew up a four-year phased programme to:
a) b) revise the existing labour legislations to meet the changing needs of the time; eliminate completely and/or control contract labour;

c)
d) e) f)

extend employment opportunities/exchanges to cover all classes of workers;


evolve fair terms of service and deal for workers; fix wages in sweated industries, rationalise rate of dearness allowance to promote fair wage agreement; and lay down nucleus for an industrial health insurance programme.

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TRIPARTITE CONSULTATIONS Recognising the need for tripartite consultation on labour matters on the pattern of the International Labour Organisation and in line with the recommendations of the Royal Commission on Labour, the Government has constituted in 1942, the Indian Labour Conference (ILC) and the Standing conference (SLC) with a view to: a) promote uniformity in labour legislation; b) lay down a procedure for the settlement of industrial disputes; and c) discuss all matters of all-India importance as between employers and employees. Both the ILC and the SLC were constituted on the lines of the composition of the ILO: a) equality of representation between the government and non-Government representatives; b) parity between employers and workers; c) nomination of representatives of organised employer and labour being left to the concerned organisations; d) representation of certain interests (unorganised employers and unorganised workers), where necessary. Cont.
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THE WORKING OF TRIPARTISM A CRITICAL ANALYSIS Tripartite deliberations helped to reach a consensus, inter alia, on statutory

minimum wage fixation (1944), introduction of a health insurance scheme (1945), a provident fund scheme (1950), leading to the passing of three importance Central Labour Laws, namely, the Minimum Wages Act, 1948, the Employees' State Insurance Act, 1948, and the Employees' Provident Fund Act, 1952. the tripartite deliberations during 1942-46 on the revision of the Trade Disputes Act, 1929 helped the Union Government to enact the Industrial Disputes Act, 1947 which laid down comprehensive disputes settlement procedures to be applicable to all states. However a few states (e.g. Maharashtra and Gujarat, Madhya Pradesh, Uttar Pradesh, and Rajasthan) made their own legislation which were operative within the state boundaries along with the Central legislation. This duality of labour administration could not be mitigated by the ILC due to obvious limitations set on it by the inclusive of 'labour' in the 'Concurrent List' of the Constitution.
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BIPARTITE CONSULTATIVE MACHINERY Towards the realization of the goals set out in the national economic plans, the Government of India has also created bipartite consultative machinery for ensuring cooperation between workers and employers. Here we shall briefly consider the experience with Joint Consultative Board (JCB) and National Apex Body (NAB). Joint Consultative Board A Joint Consultative Board (JCB) of Industry and Labour was set up in 1951 largely at the initiative of Mr. GL Nanda, then Minister for planning and deputy Chairman of the Planning Committee of Industries of Planning Commission. To begin with, the JCB was set up as an official body to consider, advise, and cooperate with the Government on matters relating to industrial relations in general and specific issues such as retrenchment in particular.
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PARADIGM SHIFT IN INDUSTRIAL RELATIONS POLICY OF GOVERNMENT OF INDIA Keeping in view the emerging economic scenario, government policies should make a paradigm shift from regulation, protection and control to enabling, facilitating and protecting from dispute resolution to social and economic development. There should be a gradual decline in the role of the state not too much and too frequent interventions. There should be a shift in industrial relation-information sharing, consultation, communication, transparency and consensus development at all levels. The state should broad-base their labour policies and labour legislations to cover unorganised sectors in a big way. The state should address the problems of diverse labour force-female worker, bonded labour, child labour, unorganised labour and migrant labour from India and abroad.
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STATE GOVERNMENTS AND INDUSTRIAL RELATION Labour is in the Concurrent List of the Constitution. According to Article 246 of the

Constitution of India, both, the Parliament and State Legislatures can enact laws on aspects relating to employment, trade unions, industrial disputes, social security etc. Generally speaking, the State Government is the appropriate authority for administering Central Laws in most cases.
Different Practices at State Level Changes in Labour Law/Policy at the State Level Recognition of Bargaining Agent Simplified Labour Inspection New Thrust in Labour Policy Permissions for Closure, Retrenchment, and Lay-off Wages
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Limits to the Powers of the State There is a limit to the role and powers of the state governments. They are dutybound to refer their enactments and amendments to the Centre for the assent of the President of India. The Central Government may on its own, or upon being referred to by the President, tender advice to form the basis for the President's decision. The

usual practice of the President's office is not to act, rather than to turn down the
proposals for changes perse. Some years ago, the Tamil Nadu government raised the limit of the number of employees required in an establishment for application of certain Central Legislations (like the Factories Act and the Industrial Disputes Act),

as well as for prior approval for lay-offs, lock-outs and closures. Similarly, it took
many years for Andhra Pradesh to get Presidential approval for its legislations concerning worker's participation in management and insurance for workers affected by structural changes. Finally, of course, Andhra Pradesh did not go ahead

with its proposals.


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